This is a rush transcript from "On the Record," October 11, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: News breaking, a crisis, the kind that a president cannot plan for, a plot the U.S. says was hatched by Iran to assassinate a Saudi ambassador here in the United States and to blow up at least two embassies here in Washington. Right now the FBI is hunting for another suspect. We don't know this suspects plan or capabilities. If Mr. Herman Cain were president tonight, what would he do?

Good evening, sir. I don't know if you saw the introduction, but what would you do if you were president in light of the terrorism plot that was thwarted today but apparently leads to the top of the Iranian government. What would you do, sir?

HERMAN CAIN, GOP PRESIDENTIAL CANDIDATE: I would have done something earlier that would have encouraged them not to do something like that. That is one of great capabilities we have is our ballistic missile defense systems that could be upgraded, and we could place the Aegis ballistic missile defense systems in international water in that part of the world.

The only thing that Iran understands is our military capability, but unfortunately they believe that they can do something like they did today and this nation is not going to react because they see this president as a weak president. They would not see me as a weak president, and I would send strong signals to let them know that we would be prepared to take whatever actions we needed to take.

VAN SUSTEREN: Under you theory you would head them off at the pass so they wouldn't do that. But assume under my hypothetical, the situation today, where it is actually happened, at least we're being told by the administration that high up in the Iranian government, they now have, at least we're told, they tried to half a plot. We have a Democratic Congressman coming out with details. Mark Kirk has details, and you have the situation where Iran is hungry for nuclear weapons.

Secretary of State Hillary Clinton, she wants to ratchet up the sanctions. What do we do? You are the president and this is for better or worse a potential crisis?

CAIN: Like I said, I'm all for sanctions but that alone is not going to do that. We have to show them our capability. And one of the capabilities that this president is not maximizing is the use of these ballistic missile Aegis warships that we have. We have a great number of them, and we are not flexing our muscles.

The biggest problem, Greta, is that Iran and a lot of other countries see this president as weak president. This is why they continue to challenge us. And I think because they see him as a weak president they basically have their fingerprint on this plot that thankfully was broken up today.

VAN SUSTEREN: Let's turn to the economy. We have a housing crisis in this country. We all know that. All these houses are under water. What would you do?

CAIN: The thing that we do, Greta, we must first grow the economy. They can talk about cutting all they want to, but until we grow this economy and get this GDP growing, we won't be able to solve any of these problems. We have 14 million people out of work and several more million underemployed.

This is why, and I know this is going to surprise, I am proposing my bold 9-9-9 plan. It will get America back to work. Why? We had it dynamically scored. It will cause the GDP to grow five percent, create six million jobs, and biggest thing, it creates certainty for the business community. When I served on the corporate boards for the last 20 years, we didn't sit around and talk about how we were going to survive. We talked about growth. In the last three years, businesses have been talking about survive. With a bold plan like the one I have proposed, businesses will start to talk about growing again.

The other thing the 9-9-9 plan would do, it would level the playing field between our products produced here and the rest of the world. It would make our products much more competitive.

VAN SUSTEREN: Let me ask you a question. I know under nine-nine-nine it lowers the income tax rate of many. You would be paying 7.5 FICA, it's nine-nine-nine as I understand it. It seems to me, though, that even that somebody may embrace your idea is that there is such a distrust of Congress and you create a new tax, a national sales tax. Most people are scared to death of congress. Even Congresswoman Bachmann talked about the fact you give it to Congress, and it's nine-nine-nine this year and it's nine-15- ning next year.

CAIN: That is the difference between someone like me who is not afraid to lead. 9-9-9 is going to pass when I'm elected president, and as president I'm not going to sign legislation that is going raise that number.

Secondly, the reason they are afraid that the number might get pushed up is because they are politicians. They are not serious about cutting expenses. I'm serious about cutting expenses in Washington, D.C. So we got the economy growing and we got expenses coming down, that is the combination and we won't be tempted.

We don't need to raise taxes, Greta. We've got spending on steroids and they are worried about how we can continue to raise more taxes. We don't need to do that. Grow this economy and cut the spending. That is what I would do as president.

VAN SUSTEREN: I'm curious if anything was said by any of the other candidates surprise you or caught you off guard, impressed you, anything at all?

CAIN: I was not surprised that my nine-nine-nine plan was going to be attacked so much. Here is why. My plan is the only one that works on the right problem. We throw out the current tax code and we impose something that is simpler, fairer, transparent, and revenue neutral.

What did surprise me was when Governor Romney said, simple solutions don't work essentially, because he has a very complicated plan that tries to cover the waterfront but all you basically did relative to the tax piece, he throws out one set of loopholes and brings in another set. That is what politicians do. I'm a businessman problem solver. I believe that is why it's resonating with people. Other than that, I think much of the comments that were made tonight were not that big a surprise.

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